Correlation Between DAX Index and Metro AG
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By analyzing existing cross correlation between DAX Index and Metro AG, you can compare the effects of market volatilities on DAX Index and Metro AG and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DAX Index with a short position of Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Metro AG.
Diversification Opportunities for DAX Index and Metro AG
Good diversification
The 3 months correlation between DAX and Metro is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG and DAX Index is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DAX Index are associated (or correlated) with Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of DAX Index i.e., DAX Index and Metro AG go up and down completely randomly.
Pair Corralation between DAX Index and Metro AG
Assuming the 90 days trading horizon DAX Index is expected to generate 0.76 times more return on investment than Metro AG. However, DAX Index is 1.31 times less risky than Metro AG. It trades about -0.06 of its potential returns per unit of risk. Metro AG is currently generating about -0.05 per unit of risk. If you would invest 1,953,162 in DAX Index on August 29, 2024 and sell it today you would lose (26,987) from holding DAX Index or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Metro AG
Performance |
| Timeline |
DAX Index and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Metro AG
Pair trading matchups for Metro AG
Pair Trading with DAX Index and Metro AG
The main advantage of trading using opposite DAX Index and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Metro AG can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Metro AG will offset losses from the drop in Metro AG's long position.| DAX Index vs. Gladstone Investment | DAX Index vs. REINET INVESTMENTS SCA | DAX Index vs. CarsalesCom | DAX Index vs. MARKET VECTR RETAIL |
| Metro AG vs. BANK MANDIRI | Metro AG vs. PT Bank Mandiri | Metro AG vs. BANK MANDIRI | Metro AG vs. BANK MANDIRI |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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